Craig Andriulli - Vice President NMLS #212830

As we all have bared witness to, many changes have been arising in the mortgage world with 2010. For instance, all mortgage companies are now equipped with new 2010 good faith estimates that must be coordinated with all parties involved in the purchase transaction and spot approvals for unapproved condo complexes are no longer eligible for FHA. Please expect more changes to come for the year of 2010 with FHA and Conventional guidelines because default ratios on existing mortgages are up.

Therefore, although we are subject to abide by these new and sudden revisions, we must learn to navigate through them as we prepare best to serve our clients in the best possible way. Instead of being disheartened with change, we must learn to adapt to change so we can propel ourselves to the top of the real estate world and be the best at what we do.

A new mortgage letter was released that pertains to a new FHA guideline change set to take action April 5^th 2010. As of this date, any transactions that have not obtained an FHA case number that are seeking FHA financing will be forced to pay a higher up front mortgage insurance premium. The up front mortgage insurance premium is a required fee that HUD charges on every FHA loan. This fee is allowed to be financed into the loan amount and currently equals 1.5% of the loan amount. As of April 5^th, this mortgage insurance premium will increase to 2.25%. This is a sizeable difference in fees so please make sure that you are aware of this shift.

Once again, if change is destined to occur, and it most definitely will, lets try and get ahead of it and our hands around it so we can make the best of it!

As many of you know, rates have really been on the move over the last 2 weeks. Rates have continued to increase due to a better outlook for the 2010 economy. Although I am extremely skeptical of this economic recovery many think is right around the corner, I do believe that the days of 4.5% - 4.75% on 30yr fixed mortgages are past us...

The biggest problem with sudden rate increases like this are obviously the immediate reactions of many of the clients we are working with. Some are in denial rates can actually go up and sometimes will put off the entire process until "rates come back down". Unfortunately many people are reluctant to realize that rates eventually do have to go back up!!!!!!!!

I am here to say that, "HELLO PEOPLE, 5.0% IS STILL A FANTASTIC RATE!". Lots of the time people become obsessed and fixated on getting the lowest rate that is humanly possible (which obviously is the name of the game) but forget that the goal is to reduce or minimize monthly obligations. So while 4.5% makes for a lower payment, rolling the dice on 5.0% in hopes of rates coming back down can result in a lose-lose situation. The volatility of the day to day economy can cause these painful rate moves which can either bring us back down to all time lows or shoot us up back to historic averages. The underlying problem is that everyone thinks they can time the market... Well as we have seen over the last couple years even the fat cat Wall Street big wigs cannot time the market, so lets keep the gambling to Vegas and Atlantic City, and remember that lower payments are the name of the game.

I look forward to your responses on how you are currently dealing with your clientele in a rising interest rate environment.

HAPPY NEW YEAR!!!

MORE CHANGES!!!!!

To all realtors and mortgage professionals alike, 2010 will prove to start with a major shift toward even further tightening mortgage guidelines. As of January 15th 2010, FHA looks like they will be straying away from anything equal to or greater than 50% debt to income ratio. Although maybe a necessary evil in light of high default ratios on newer FHA loans, it also becomes another reason for lots of the main investors on the street to turn down deals...

As a word of advice, adjust your pre-qualifications now for any clients that may be looking to buy in the near or far future and may be pushing this debt to income ratio threshold. It will save you time, stress and heartache!

Happy New Year!